Demolition Activity Subdued Due to Holidays in Southeast Asia
In a separate note, shipbroker Allied Shipbroking said that it was “another week of a relatively uninspiring flow of candidates being sent to be recycled, with the overall supply of tonnage remaining problematic at the same time. This also deductible by the very high offered scrap price levels across the Indian Sub-Continent, with buyers in the region remaining hungry (and bullish) for any and all available large LDT unit. The recent negative corrections in the dry bulk freight market (especially in the bigger size segment) has nourished somehow the expectations for any increase in number of vessels being pushed towards this direction.
On the other hand, the tanker market is moving in the opposite direction, given the improvement in both earnings and overall sentiment, having derailed the supply levels available to the ship recycling market. All-in-all, with fundamentals in both local steel prices and currencies remaining on the positive side across the main demo destinations, it is yet to be seen if we are about to witness firmer activity levels take shape in the upcoming period”, Allied concluded.
Meanwhile, GMS , the world’s leading cash buyer of ships said this week that “sub-continent markets remain high overall, as they enter the final months of the year and yet, the paucity in the overall supply of vessels indicates that bullish Recyclers have been unable to get their hands on any meaningful tonnage. Cape Rates have come off spectacularly over the past few weeks and as such, there may (finally) be a few Ship Owners who may reconsider scrapping their vessels (in this category) rather than passing further surveys. Tanker chartering rates have also started to stabilize somewhat, and as such, there may not be the deluge of vessels in the coming weeks, in comparison to as many that have been traded in the recent past and specifically from this sector. With the firming rates, Vessel Owners may choose to keep their vessels for a possible rally rather than cashing in at an early stage. This is certainly something of a surprise to many in the industry given that recycling levels are at the highest they have been since the sky-high days of 2008, when USD 800/LT LDT was breached. Diwali holidays have also stifled some of the progress from India this week, yet, fundamentals across the sub-continent markets remain in positive territory overall – as both steel prices remain firm and currencies (except in Turkey) relatively stable. Bangladesh and Pakistan continue to compete on geographically positioned large(r) LDT vessels and several FSUs have been committed from existing Cash Buyer inventories over recent weeks. Finally, the Turkish market spent another slow week, despite firming prices, stronger local sentiments, and a Lira that continues to languish at record lows against the U.S. Dollar”, GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide